Subsidizing Industry: An Empirical Analysis of Irish Manufacturing

Irish industrial policy makers have a long history of extensively using grant subsidies in order to encourage the creation of jobs in Irish manufacturing sectors. In this paper we empirically investigate the actual success of this strategy using sectoral level data on employment and grant payments over the period 1972--2000. Results from our empirical model of an employment growth equation confirm that grant provision has indeed played a significant role in creating employment.